The evolution of cryptocurrency has given rise to several different technologies, including advancements in blockchain technology. EOS attempts to use blockchain technology in a new way that allows for better computer application management. This guide should help explain what EOS is, and how it may be applied and valued in the future.

What is EOS?

EOS is basically a giant decentralized operating system built on blockchain technology. It is intended to bring cryptocurrency level security, ease of use, ease of development and scalability to decentralized apps that handle thousands of processes a second.

The EOS network will have the capability to support commercial-scale applications by enabling vertical and horizontal scaling as well as providing all the functionality a developer would need (including databases, authentication, communication with the internet) to make great apps.

Use of coins

EOS coins are the currency of the network. The coin is a badge of permission, allowing one access to the network to either build applications on it or rent data and space to others. These coins enable Delegated Proof of Stake security and acts as a claim on server resources. It is important to note that, unlike Ethereum, EOS developers will not spend to use the network’s resources, rather they just need to prove they hold them. This is a big selling point of EOS.

The intention of EOS is to form a network where peer to peer voting approves transactions, and inactive voters are replaced at regular intervals, so the completion of blockchain approvals is sped up considerably. This will allow EOS to be used as a reliable decentralized system for applications like Facebook or Amazon.

Coin details

EOS coin’s market cap as of this article’s writing is $11 Billion US dollars. At its initial release in July 2017, the value was worth $656 million US dollars. Distribution and increase of the maximum number of coins are managed at regular intervals, with 883 million coins in current circulation. The total number of coins is currently 900,000,000.

EOS is listed on major coin exchanges, including Binance and Bitfinex. EOS was created by a business known as block.one, which operates from the Cayman Islands. They are currently in possession of 100,000,000 coins, or roughly 10% of the maximum supply. There are no plans to exceed the coin maximum.

Who created it

Dan Larimer – CTO of EOS

EOS was founded based on a white paper released in 2017. Block.one worked on the development of the system with Daniel Larimer as the Chief Technology Officer. 200,000,000 coins were distributed during a five-day period in June 2017. And in a novel way of conducting an ICO, they sold 700,000,000 coins which were evenly distributed over 350 consecutive 24-hour periods, starting on July 1, 2017. Finally, 100,000,000 coins will be reserved for the use of block.one itself.

Funding

The founders developed a plan to receive funding through a unique ICO (Initial Coin Offering). The total period of distribution lasted roughly one year, with 200,000,000 coins offered in the first five-day period. 7,000,000 coins were evenly distributed after that over a 350-day period, with the secularization of purchases meant to allow for adaptable costs and demand that could change to meet investor interest or lack thereof. The last 100,000,000 coins were purchased in reserve by block.one itself to maintain access and control over the entire system.

Example of an EOS token distribution period

EOS is initially selling tokens on the Ethereum network, which are ERC-20 compatible, to raise funds and allow their value to rise on crypto exchanges through speculation.

On June 2, 2018, all EOS tokens were swapped out for native coins which can be used on the their network. The tokens on the Ethereum network were discarded as they will hold no value at that time. EOS simply used the Ethereum platform to raise funds for their own native coin. The holding of EOS coins gives developers access to bandwidth on the network.

As of this article’s writing, EOS has raised approximately $4 billion US dollars!

What does EOS do?

EOS is meant to be a decentralized operating system, from which various applications are meant to run on. This means Block.one is only creating a platform, and other developers and companies then build applications to run on the new the system. They provide a solution to the scaling problems of the old Ethereum and Bitcoin networks by providing a network that can handle millions of transactions per second.

Ease of use

The general consensus among developers and new users of the Ethereum network is that it is difficult to use and has a steep learning curve. EOS plans to fix that by offering capabilities such as:

A built-in authentication system (ex. user accounts with username and passwords),

A web toolkit for interface development

Enabling developers to share libraries and frameworks

And offering many more essentials, such as cloud services, a developer would need to create a great app. This allows the developers to focus more on the business and less on the code.

Cloud services

EOS will offer hosting services, databases, cloud storage, asynchronous communication and application scheduling. All the tools needed to build a decentralized app that can process millions of transactions per second.

Free to use

Unlike Ethereum, developers and users will not have to pay transaction fees to perform tasks on the EOS. Developers will be able to choose if and how much transaction fees would cost to use their app. This opens up the possibility of creating free or freemium applications.

Scalability

EOS fixes one of the biggest scalability problems plaguing current blockchain technologies, such as Ethereum, which is the number of transactions these networks can handle without slowing down a great deal. They do this is in few ways:

By offering asynchronous communication and parallel processing

Using a Proof of Stake model in which transaction fees are eliminated, greatly increasing throughput.

Using consensus over events rather than consensus over state, like Bitcoin or Ethereum. Nodes verify the series of events that have occurred to keep track of the network rather than verifying the state of the entire blockchain. This increases throughput tremendously and is a huge advantage over other blockchain networks.

How does EOS work?

EOS uses a decentralized consensus algorithm known as Delegated Proof of Stake. With this algorithm, those who hold tokens on a blockchain adopting the EOS.IO software may select block producers through a continuous approval voting system. If they can persuade holders of tokens to vote for them, then anyone can participate in blockchain production.

Blocks are produced in rounds of 126. Each round, unique block producers are chosen by voting through token holders. If a voter or block producer is consistently absent, they are removed from voting after a period of time.

The system also allows block producers to work together, instead of competing, and follows the larger path on the rare occasion block productions fork. This minimizes the time delay between block productions and ensures fewer mixed blocks.

Blocks are produced in rounds of 126 (6 blocks each, 21 producers).

21 block producers are chosen by voting token holders.

The producers are scheduled in an agreement by 15 or more producers.

Byzantine Fault Tolerance is added to DPOS. Once 15 producers have signed a block the block is deemed irreversible. To sign, they must use a timestamp and signature. If the same signature and timestamp were used on more than one block, it would be proof of tampering. Once it’s been proven this is impossible, a block is thus deemed irreversible.

When transactions complete, they have a hash in the block name. This tells the network a user was on that specific fork and prevents others from replaying that transaction. Eventually, all users confirm the chain, which prevents counterfeit forging as because it would be unable to migrate the real transaction chain.

Who uses EOS?

EOS is used by developers intending to create software or applications on the blockchain network, similar to Ethereum. Possession of EOS coins are necessary for those looking to act as block producers under EOS security, as well as those who will act as voters and operators for network.

The types of applications that can run on their blockchain network is large in scope. So a wide variety of end users will also be utilizing the power of EOS any time they access or run a dapp (“decentralized application”).

Above is a simple diagram comparing the EOS ecosystem to more traditional competitors such as Apple or Android. In a nutshell, EOS operates as a giant decentralized computer (similar to an Apple or PC), with its own operating system (similar to Windows or iOS) and it own decentralized apps (similar to the App Store).

Usage Vs. Speculation

Its value lies in its speculative use, that is, its use to come. The evolution of its network, the adoption rate of developers and users and the effectiveness that other competing networks deal with their scalability issues will determine EOS’s future value.

The practical usage of EOS coins is to grant access to the EOS network. Their use is as a key, allowing participation in block compiling and other, as yet not fully explored opportunities.

Competitors

Crypto-competitors

Competitors include blockchains with smart contract compatibility, like Bitshares and Graphene. R-chain, Rootstock/RSK, and Crown have not released decentralized operating system platforms themselves yet, but they may be capable of matching a lower price point.

EOS’s largest competitor is Ethereum. Purchasing of EOS coins was done exclusively on Ethereum, but it considers itself a potential upgrade to the ETH network. In fact, block.one is approaching the production of EOS with the intention to integrate it with the Ethereum network, to improve its system as well as potentially many others.

Common questions

What does EOS hope to achieve? EOS wishes to provide a decentralized operating system, which thousands of business level Dapps will be able to access. Ideally, these Dapps will be capable of both vertical and horizontal scaling. This will allow blockchain security to be applied at micro and macro levels, where blockchain mining and other security methods were formerly incapable of performing without significant lag.

Who is involved?

The CEO is Brendan Blumer, founder of block.one and a member of Forbes’ Crypto Rich List. The second important figure and a fellow member of the Forbes Crypto Rich List is Dan Larimer, the Chief Technical Officer of block.one, the company developing EOS. Finally, there is Ian Grigg, a Partner involved with the financing and production of EOS as well.

What makes EOS a good investment? The value of EOS depends entirely upon its adoption. It is the fastest funded coin in history, but the creators have publicly admitted that there are no planned returns for the EOS network’s development itself.

Is there a currently working product? EOS will be officially available following its public release as of June 2018.

Their roadmap

Phase One: Minimal viable testing environment.

A single node operated a test blockchain and produced blocks while exposing an API. No peer to peer proofs were required.

Contracts were compiled with WebAssembly and made to interact with blockchains via a predefined API.

The RPI Interface, which is necessary for publishing the results of transactions, was tested.

The Command line, which allows the RPI Interface to interact with developer’s-built software, was then tested.

Basic Developer Documentation, which teaches others to interact with the ESO system, was then produced.

Phase Two: Minimal Viable Test Network (Done in Fall 2017).

The peer to peer network code was tested, to test synchronizing the blockchain between more than one node.

The WebAssembly was then checked for floating point operations and infinite loops that could cause errors.

The resource usage rates were monitored, to test limits and EOS stakes.

A genesis configuration file was created. This allows those interested in creating for the EOS system to test it beforehand.

Finally, the Merkle hashes integral to the naming were tested.

Phase Three: Testing and Security Audits (Winter 2017-Spring 2018).

The third phase was approached with a focus on finding security faults. First, example applications similar to what developers might create later were produced.

Bounties were then offered for attacks against the network, including spam attacks and bug crashes, order to test system stability.

Support was added for additional programming languages beyond C++.

Phase Four: Parallel Optimization (Fall/Winter 2018)

Phase Four will be focused on optimizing the code for parallel executions.

Phase Five: Cluster Implementation

The final stage will be focused on implementation as a working, active network with all developments and updates done on a case by case basis.

How to buy EOS coins

EOS cannot be mined nor can they be purchased using traditional fiat like US dollars. One of the easiest way to acquire EOS cryptocurrency is through a crypto exchange like Binance.

This requires you to purchase Ethereum or Bitcoin from an exchange like Coinbase first. You can then transfer those coins to an exchange and trade them for EOS. Here are a few of the exchanges you can trade EOS on:

A “social” exchange offering CFD trading, allowing users to long or short positions. You can invest in cryptocurrencies based on opinions of others in the community. It’s a different and fun way to approach trading. You can also trade stocks, commodities and forex. There are not many platforms that offer those markets together. You can’t transfer the coins you purchase off the etoro exchange though. You would have to convert it back to fiat to withdrawal your funds. So they don’t actually offer wallet services.

Founded in Melbourne in 2013. Coinspot offers an easy way for Australians to purchase a large variety of coins with cash. They also support BPAY and POLi payment deposits. The have a clean and easy to use interface. With no history of major hacks, Coinspot seems to be a well run cryptocurrency exchange. Their fees are competitive and they have one of the largest choice of coins among fiat to crypto exchanges.

Kraken is one of the world’s largest cryptocurrency exchanges and one of the few that allow users to deposit fiat money into their account. Most crypto brokers charge high commissions and fees for this service, but Kraken does not. We really like their platform and their choice of coins.

Extemely simple and clean interface. Well established. Great for rookie investors and EU customers. Among the cheaper exchanges with easy buy and sell functionality. Lots of payment options. No way to trade cryptocurrency pairs and lacking more advanced trading options. US customers are not allowed.

A Ledger Nano S is also an acceptable wallet for EOS tokens. It is compatible with ERC-20 tokens.

It is important to note that after June 2, 2018, all ERC-20 EOS tokens were swapped for native EOS mainnet coins. After mainnet has been launched, users will be able to access their coins through the official EOS wallet and their address they obtained when registering their ERC-20 tokens.

Conclusion

To sum it up, EOS is a decentralized operating system on which anyone can develop and host dapps. They are a direct competitor to Ethereum and they address many of the problems that Ethereum is currently facing, mainly scalability, high transaction fees and high barriers to entry for developers.

There is a lot of speculation, excitement and skepticism built up around EOS. It has conducted the largest ICO in history raising nearly $4 billion. The problems they are tackling are huge and if solved will increase the rate at which blockchain technology is adopted. Needless to say, they have a lot on their shoulders. Only time will tell if they can achieve their lofty goals.

EOS is a giant decentralized operating system built on blockchain technology. A major competitor to Ethereum, it is intended to bring crypto level security, ease of use, ease of development and scalability to decentralized apps.